the brompton-ness of it all

process knowledge and such like

I realise I have a very bad track record for promising book reviews and then not doing them, but I am reading “Breakneck” by Dan Wang at the moment and it is very interesting on a lot of issues adjacent to this blog. So why not buy it, and then you can feel informed and make clever comments when my post comes out (or feel smug when you finish it and I still haven’t written the thing). In the meantime, I find myself wanting to respond in true improv theatre “yes, and …” style to Henry’s most recent post about Breakneck, which looks at the importance of “process knowledge” in industrial development in China (and implicitly, the possible consequences of losing it under the US industrial system of the last fifty years).

To start with, here’s a lightly edited but basically verbatim chunk of the notes I took while speaking to Will Butler-Adams, the CEO of Brompton Bicycles, for the book I wrote with him a few years ago. Will was talking about the general approach to outsourcing:

There’s a sort of wire clip that holds brake cables in place. So the way we used to make them is that you get someone from the assembly line with strong forearms, and a bending jig that the wire goes round. Bend it to the right shape, snip the wire, make another one. Get them to do 500 of those. It’s at least a day’s work.

It’s not exactly efficient, but it’s a small part of the bike, low value added. They do make CNC[1] wire bending machines, but it was never going to be worth our while to buy one. So, it’s a good decision to outsource that. A specialist wire bending company has the machines, they can do a few thousand at a time, it’s cheaper and it frees up factory space.

[digression on the accounting effect of this – the wire clips’ share of the factory rent, insurance, etc of the wire bending company now shows up as a cost of inputs rather than an overhead, which can complicate things]

Before I make this kind of decision, though, I really have to ask myself – am I one hundred per cent sure that the wire clip is never going to change in any important way? Because once you outsource something, all the knowledge about it is now going from your factory to somebody else’s. Improvements in the manufacturing process accrue to them, not you. You’re not going to notice things, you’re not going to innovate that component.

The wire clip is a wire clip. It might change shape with a different design, but there’s not going to be a new game changing way to clip cables. And it’s very cheap. Difficult to see how there’s a game changing way to make them much more efficiently. So that wasn’t too difficult.

But that’s unusual. Most of the other components, I wouldn’t want to outsource, because I don’t want to lose the knowledge. If something has … “Brompton-ness” to it, we have to do it ourselves. That’s not intellectual property, it’s not necessarily something unique to the bike. But if something has that thing to it, that it’s something we want to make better, or we’d benefit from making more efficiently, then it’s got Brompton-ness, it’s part of the bike, part of the DNA.

That was why it was so important to me to get the paint shop back in house.

[long digression, part of which ended up in the book, about how Brompton’s website ordering and customisation system, began as a quality control tool for the paint shop]

And the BWR[2] gear. That’s made in Taiwan by Sunrace, the people who took over Sturmey-Archer. But [reference back to previous conversation] we hired the chief designer from Sturmey at the time of the takeover. We sent him out to Taiwan to help Sunrace set up the factory. And the BWR is our gear. We don’t literally manufacture it but it’s got Brompton-ness, and so even though it’s not made in the factory, we want to have that as part of our thing.

The concept of “process knowledge” that Henry and Dan are talking about is, of course, British. Specifically, it was first observed in Sheffield, in the cutlery industry, in a famous passage from Marshall:

“When an industry has thus chosen a locality for itself, it is likely to stay there long: so great are the advantages which people following the same skilled trade get from near neighbourhood to one another. The mysteries of the trade become no mysteries; but are as it were in the air, and children learn many of them unconsciously. Good work is rightly appreciated, inventions and improvements in machinery, in processes and the general organization of the business have their merits promptly discussed: if one man starts a new idea, it is taken up by others and combined with suggestions of their own; and thus it becomes the source of further new ideas. And presently subsidiary trades grow up in the neighbourhood, supplying it with implements and materials, organizing its traffic, and in many ways conducing to the economy of its material.

Again, the economic use of expensive machinery can sometimes be attained in a very high degree in a district in which there is a large aggregate production of the same kind, even though no individual capital employed in the trade be very large. For subsidiary industries devoting themselves each to one small branch of the process of production, and working it for a great many of their neighbours, are able to keep in constant use machinery of the most highly specialized character, and to make it pay its expenses, though its original cost may have been high, and its rate of depreciation very rapid.

Again, in all but the earliest stages of economic development a localized industry gains a great advantage from the fact that it offers a constant market for skill. Employers are apt to resort to any place where they are likely to find a good choice of workers with the special skill which they require; while men seeking employment naturally go to places where there are many employers who need such skill as theirs and where therefore it is likely to find a good market. The owner of an isolated factory, even if he has access to a plentiful supply of general labour, is often put to great shifts for want of some special skilled labour; and a skilled workman, when thrown out of employment in it, has no easy refuge. Social forces here co-operate with economic: there are often strong friendships between employers and employed: but neither side likes to feel that in case of any disagreeable incident happening between them, they must go on rubbing against one another: both sides like to be able easily to break off old associations should they become irksome. These difficulties are still a great obstacle to the success of any business in which special skill is needed, but which is not in the neighbourhood of others like it: they are however being diminished by the railway, the printing-press and the telegraph.”

That last sentence interests me the most; remember that in their day, “the railway, the printing-press and the telegraph” were the information technology revolution. So even from the middle of the industrial revolution, there has always been some sense that process knowledge, tacit knowledge, “Brompton-ness” and similar concepts are always contingently defined; the boundary between “techne” and “metis” is itself technologically determined.

And so I find myself wanting to … stop writing before I say something dumb! But just before doing so, to wave in the direction of the British industrial model; the “Old Rectory Mittelstand”. Which is to say, the practice of selling expertise and process knowledge directly as a service, rather than the German or Chinese approach of selling it bundled together with a metal box that has a motor and a microprocessor in it. Of course, to do so invites the response that the British model is a productivity disaster area. But I wonder whether, when you’re looking at something that’s been in constant decline for fifty years but never seems to get all that much worse, the argument that the UK’s productivity problems are heavily concentrated in exactly those sectors where productivity is famously difficult to measure might have some merit.

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[1] Computer Numeric Control – a programmable manufacturing tool

[2] Brompton Wide Range, a three speed hub gear with a particularly wide range of gear ratios from bottom to top, which works with a rear derailleur to allow the six-speed Brompton to have a normal gearing range.